State Gift Taxes

For the most part, the gift taxes that are set by the federal government are the only gift taxes that apply to monetary gifts and estate gifts that are given. These gift and estate tax rates are invariable between states and the same rate applies to each state in the country. The only state that imposes a gift tax is Connecticut.

Gift taxes, at either the federal or state level, are not assessed for every single financial gift. The rates for gift taxes usually only kick in after a set amount of money has been given, and these rates are set at an amount high enough so that most people don’t have to worry about them for routine financial gifts. For instance, most states adopt the law that any gift under the maximum value of $14,000 (as of 2015, 2016 and 2017) is considered exempt from any sort of gift tax, federal or otherwise. These values are subject to change, however, so it might be wise to look into the current tax year's rates.

Further, there may also be exemptions to the gift tax if qualified medical or educational expenses are paid directly to a health care provider or to a educational institution.